For decades, Ethical Finance was seen as an oxymoron – a contradiction in terms. People even working in finance would say that it’s all about opportunities, profits and wealth – there is no scope for ethics. After the 2008 crash, there was a much deeper global reflection about the greed of bankers and their incompetence, with society bearing the risks of speculative and exploitative finance.
Sadly, the bandwagon keeps rolling, and the short-term attractions of money dominate so much of financial behaviour and institutional greed, that ethical finance is still seen as a spin machine rather than a call for substantive change in behaviour and institutional goals. Readers of this weekly column will know that my research is more fundamental, and showcases the fact that money is a social and cultural construct – its foundation is moral and ethical, so the oxymoron is a problem of the fictitious and damaging science and education in finance.
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The Global Ethical Finance Initiative has invited me to speak at its third international conference in Edinburgh next week on the theme of Jain and Hindu Finance. The City of Edinburgh has a long history of Faith and Finance, and my friend Russell Napier conducted guided tours and has set up the Library of Mistakes there to remind people of financial hubris. The role of faith and belief in finance, and its influence on leadership conduct and behaviour, is now being explored more deeply. Islamic Finance has gained significant importance due to the large global population and the significant sums involved. In fact, even in international corporate finance textbooks, there is a chapter on Islamic Finance, but nothing on other religions or cultures, even when they too have a long tradition in finance. My chapter on Jain Economics, and another on Hindu Economics, recently opened the new Oxford Handbook in Economic Ethics, showing how important and prominent Hindu and Jain wisdom is for the modern world.
The interest today is because of the economic might of India and its influence in the world of finance, but what I will explain is how this wisdom is relevant for the whole world, not just Hindus and Jains. Sustained success in finance is based on conscience, discipline, hard work, enterprise and the importance of reputation and honour in our communities. These principles and values act as a self-regulatory mechanism, and in our family businesses, sustainable thinking is in-built because we want to pass the business on to the next generation.
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The result is the large and growing economic success of India today, something which may seem like a recent invention, but has very old roots, with India trading with the world over two thousand years ago. In the eighteenth century, one-third of world trade was dominated by India, and today we are marching forwards again to that peak, in spite of the robbery and expropriation of the British Empire. This is evidence of our spirit of resilience, and our determination to grow and build whole economies and societies wherever we live. The diaspora are equally successful agents of change and progress in business and finance all over the world. However, to trade with India cultural intelligence is required, and that is never an off the shelf formula.
We have a lot to do to bring Hindu and Jain ethics into the business and finance curriculum. One of the barriers is the word ‘religion’ which is implicitly banned from most business teaching, even though Dharma is so different, inclusive and respectful of all living beings, encouraging humans to be kinder and more responsible rather than arrogant. We don’t just have a good science for the finance world – we actively live and breath principles of compassion and care, and understand the limits of finance. Death is not something to be feared or postponed but to be embraced and charity is a way to leave a legacy and to share what we have earned with humility and generosity. Community and belief help to nourish our conduct and character, and prevent it from freezing our hearts or expanding our egos. Such is the Hindu/Jain way of finance.
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Professor Atul K. Shah [@atulkshah] teaches and writes about Indian wisdom on business, culture and community at various UK universities and is a renowned international author, speaker and broadcaster.